What companies say, matters, Jim Cramer told his Mad Money viewers Wednesday, and setting Chinese trade worries aside, business is pretty good in our country right now.
Cramer said there were three takeaways from his interview earlier today with chief economic advisor and former co-host, Larry Kudlow. First, the Chinese don't seem to want to make a deal on trade, at least not yet. Second, we may be close to a deal when it comes to trade with the EU. And third, despite trade uncertainties, the U.S. economy remains very strong.
This third point, Cramer said, matches what he's seeing and hearing from individual companies. United Continental (UAL - Get Report) posted an upside surprise that sent shares up a quick 8.7%, helping to move the all-important transports higher today. Railroad CSX (CSX - Get Report) confirmed this strength, seeing revenue increase by 6% with everything from chemicals to coal rising in volume.
Then there's technology, where even a $5 billion fine from the EU wasn't able to hold shares of Alphabet (GOOGL - Get Report) down for more than a few hours. Google follows in the footsteps of Netflix (NETFLIX earlier this week, proving that investors have a seemingly endless appetite for tech.
All of this adds up to a very strong economy, Cramer concluded, possibly one strong enough that even China might not be able to derail it.
Cramer and the AAP team offer their views on the results of Amazon.com's (AMZN - Get Report) Prime Day promotion performance. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.
Executive Decision: IBM
For his "Executive Decision" segment, Cramer welcomed back Martin Schroeter, senior vice president at IBM (IBM - Get Report) , which today posted a four-cents-a-share earnings beat with better-than-expected revenues, but still sees its shares trade for paltry 10 times earnings.
Schroeter explained that the trajectory for IBM's businesses continues to improve and his company is seeing growth in cloud, analytic and cognitive services. IBM's gross margins are a mixed bag, however, and Schroeter admitted there may be more pressure as the company transitions to more services in their mix.
Speaking of services, Schroeter said that they remain in a competitive business but are seeing big wins, such as with the Australian government, which felt that IBM had the products and the service expertise to serve their needs for years to come. Companies and governments alike trust the IBM will not be competing with them and will always have their interests in mind, Schroeter added.
When asked about the company's mainframe business, Schroeter was upbeat, saying that there are still things that only mainframes can do and others, like encryption, that mainframes do better than any other solution.
Finally, when asked about blockchain, Schroeter said that IBM has more blockchains in use than anyone, as companies trust IBM's security, scale and open source architecture.
Over on Real Money, Cramer talks about why one of the biggest dampers on this market has been the transports. Get more of his insights with a free trial subscription to Real Money.
Reconsidering Retail REITs
Is it time to reconsider the retail REITs? Cramer told viewers back in March to avoid the sector, but now he said the facts have changed and it's time to reevaluate.
Back in March, retail was slowing, Amazon was looming large and the 10-year Treasury was making bonds look attractive, Cramer explained. But today, retail is on the mend, interest rates have stabilized and investors are once again clamoring for domestic stocks that are immune to trade and tariff fears.
Cramer said that shares of Simon Properties (SPG - Get Report) are up over 12% from their spring lows after the company reported strong earnings. Shares yield 4.5%. He was also a fan of Federal Realty Trust (FRT - Get Report) , which yields 3.2%. Federal Realty has been betting big on experiential, mixed-use properties and its bets are paying off big.
Finally, Cramer noted that Pennsylvania REIT (PEI - Get Report) shares are up 20% from their lows and the stock now yields 7.8% after the company trimmed 40% of its portfolio. Cramer said it's hard to hate a group that's performing so well, especially now that the environment and the sentiment has shifted to the bulls.
Executive Decision: First Horizon National
In his second "Executive Decision" segment, Cramer checked back in with Bryan Jordan, chairman, president and CEO of First Horizon National (FHN - Get Report) , the regional bank with shares that fell 4.3% as Wall Street scrutinized the bank's revenue for the quarter.
Jordan said he's excited about his bank's momentum and position in the market. They continue to focus on the integration of Capital Bank, which First Horizon acquired, to ensure customers have a great experience. First Horizon's fixed income business did see some weakness, he said, but overall credit quality remains good and the economy remains strong.
Jordan added that they see at least $17 million in initial incremental revenues from the Capital Bank deal, with lots more opportunities in the markets they now have access to. First Horizon also retired $45 million worth of stock in the quarter.
Cramer said the stock of First Horizon is on sale and investors should be buying.
In his "No-Huddle Offense" segment, Cramer said investors tired of endlessly hearing about the FANG stocks should consider some suggestions from Greenhaven Associates CEO, Ed Wachenheim, who offered up his list of the "least sexy value stocks" around.
Wachenheim was bullish on Citigroup (C - Get Report) and Goldman Sachs (GS - Get Report) over a two- to three-year time horizon, as well as on homebuilders like Lennar (LEN - Get Report) and DR Horton (DHI - Get Report) .
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